A major contributor to the national economy


Oct 25 - 31, 2004





The development of Thar Coal Power Project and Gwadar deep sea port are the projects which are bound to change the course of social and economic history of the two remotest parts of our country.

Although the two projects would ultimately contribute to the national economy, but the most significant outcome of the two projects, in my opinion, would be a better change in the life of the socially, economically and financially starved people of the neglected areas of Gwadar in Balochistan and Thar in the province of Sindh.

It is of course a great failure of the system whether it is democracy or army rule when it fails to ensure equitable distribution of the national resources. Is it not an irony of the system that a large portion of the country was provided all sorts of facilities and amenities to enjoy the luxury of the modern living, better education to their children, better health and employment opportunities while people of some neglected areas were left helpless even for potable water what to speak of having a dinner in five star hotels and sending their children in costly English medium schools.

Even the people having a mind-set owing to their political affiliation would be doing injustice if not appreciating the two projects which I rate as something great of course the historic achievement of the present team in the power corridors. I am paying these tributes because they did it while others did nothing except the lip service to earn cheap political gains or playing with the gallery during the last 56 years. These are the harsh realities whether one may agree or not.

The so-called champions of the human rights and the stalwarts for the cause of the poor despite having opportunities to rule this country did not take pains to produce something concrete for the betterment of the neglected people.


Despite having enormous energy resources it is of course painful to note that Pakistan is considered as an energy-starved country reflected in the fact that half of its population still have not access to the basic need of electricity.

The previous governments tried to overcome the scarcity of power by inviting Independent Power Producers (IPPs) in the private sector both local and foreign investors. Though as a result of the arrival of IPPs helped to overcome the shortage of power to some extent but at what cost? The signing of the power purchase agreement with the IPPs was nothing but to trifling with the fate of the poor of this country who are still suffering from the unbearable cost of the power and resulting a quantum jump to the power price in Pakistan. Those who signed these power purchase agreement in dollar terms in fact did a cruel joke with the poverty ridden people of this country. Consequently, the two major power utility companies i.e. WAPDA and KESC are suffering from huge line losses (power theft) which is said to be 37-40 percent. The only reason for such a huge power theft is the exorbitant price of power which is beyond the reach of the people of normal income groups.

Obviously, the cost of electricity continues to increase with the increase in the international price of oil as the major portion of electricity generation based on oil-fired system in Pakistan.

The Thar coal power project becomes more important because it would be the first project which would be generating power at the economy of the scale by using the coal so far lying untapped in the desert of Thar. It would set a new trend in power generation system of the country.

In Pakistan, power is produced by using fuel oil, natural gas, a small amount through nuclear technology and by using the water resources. The cheapest source of power generation is of course hydroelectricity, but this very important sector has been marred because of politicization.



After hydel resources, coal is another fuel which will help generating cheaper electricity without any burden on the economy. Pakistan spends around $3 billion on the import of oil and this massive drain of the hard earned foreign exchange due to import of oil may further exceed this year due to record increase international oil prices.

The Thar coal power projects each of the two with installed capacity of generating 300mw of power would be a valuable contribution to the national economy and reducing the burden of using the costly fuel oil for power generation.

The project becomes more significant especially by setting a trend to utilize the precious natural resources so far neglected by our genius economists and policy makers. Once the Thar coal mines start commercial production, obviously not only the power sector but other fuel consuming industries would also benefit from this natural gift which is said to be the third largest coal field in the world. The neglect of such a precious resource can rightly be described as a criminal neglect on the part of the people who enjoy the reigns of this country.

Sinuha Group of China has undertaken the responsibility to bring this project to a reality at a total cost of one billion dollar.

The Chinese group engaged with the Thar coal project is currently busy in acquiring necessary permission with the Chinese government and is expected to go into production by the end of December 2005.

According to initial plant, the Unit-I of the power plant would be put in to commercial operation in 46 months and Unit-II six months later.

The total cost of the project was estimated at $ one billion which includes $455 million for mining work while the remaining portion of the cost will go for power generation. The agreement requires WAPDA to lay the 500kv line from power station to the nation grid, Jamshoro.

Pakistan will pay power rates for 30 years but not in dollar terms. However, the rates will be decided by the Thar Task forces headed by Prime Minister Shaukat Aziz.

The infrastructure for the mining side will be raised by Pakistan for which the federal government has provided one billion rupees and a matching amount by the provincial government. The road from Jamshoro to project site via Thatta has been upgraded and widened to facilitate the movement of several thousand tons machinery from China.

The German company which has prepared the bankable study of Thar coal will give a presentation sometimes during current month. Most of the labor, required for the project, will be recruited from the local population and their training will be carried out by the Chinese.